Corn Mixed at Midday

Corn futures are mixed due to bear spreading, with December contracts trading at a premium to July. The US corn crop is 93% planted, matching the 5-year average, and emergence is slightly ahead of normal; however, planting lags in several states. Condition ratings improved slightly to 69% good/excellent. April saw 425.8 million bushels of corn used for ethanol production, a 6% decrease from March but a 0.77% increase year-over-year and a 6-year high for April.

Analysis

Corn futures exhibit mixed trading patterns characterized by bear spreading, with December contracts now commanding a premium over July, which experienced a slight decline of ½ cent while other contracts saw gains of 2 to 3 cents. The national average cash corn price remains steady at $4.13 1/4. Current U.S. crop progress indicates 93% planted as of Sunday, aligning with the 5-year average, and emergence is 1 percentage point ahead of schedule at 78%. However, planting pace lags in Indiana (-4%), Kentucky (-9%), Ohio (-15%), Pennsylvania (-13%), and Tennessee (-5%). Crop condition ratings showed a marginal improvement, with 69% rated good/excellent, a 1% increase, and the Brugler500 index up 1 point to 375; notable improvements were seen in Colorado (+26 points) and North Dakota (+16), while Kentucky (-14 points) and Tennessee (-10) saw declines. April's corn usage for ethanol production was 425.8 million bushels, a 6% decrease from March but a 0.77% increase year-over-year, marking a 6-year high for the month. Year-to-date corn consumption for the marketing year reached 3.634 billion bushels, up 20 million bushels from the previous year. Adding to supply considerations, Ukraine's Agriculture Minister projects the country's corn crop near 26 MMT, significantly below the USDA's initial 30.5 MMT forecast.

Key Decisions for Investors

• Monitor the evolving U.S. crop conditions closely, particularly in states with lagging planting progress and recent declines in condition ratings, as these could influence yield expectations.
• Evaluate the implications of the December futures contract trading at a premium to July, which may signal market anticipation of tighter supplies or stronger demand later in the marketing year.
• Consider the potential tightening of global corn supplies stemming from Ukraine's lower crop estimate of 26 MMT, which could support prices if realized.
• Assess the robust year-over-year ethanol demand against the recent monthly dip, as sustained strong usage remains a key supportive factor for corn prices.